Kordia Reports Net Profit

Boutique telecommunications and media company Kordia has reported an improved financial performance as investments made during the past few years begin to contribute.

Net profit, before an income tax adjustment for the tax change to building depreciation and corporate tax rates, for the year ended 30 June 2010, improved by $3.3m to $2.2m.

Revenue was up 1.8% to $258.3m, EBITDA increased 23.6 per cent to $50.8m and EBIT improved 90.9 per cent to $14.7m.

Strong cash flows and tight financial controls enabled Kordia to invest a further $22.5m to support growth and product development while reducing net debt by $16.3m to $89.1m.

The tax adjustment for the tax change to building depreciation and corporate tax rates is $3.1m and subtracts from the underlying profit of $2.2m to deliver a net loss of $0.97m. This tax adjustment applies only to the 2009/10 financial year and has no impact on future years’ profitability.

Geoff Hunt, Group CEO, says that the acquisitions and investment made in new products during the last few years are now contributing strongly as Kordia continues to transition its business from broadcast to broadband.

“Orcon has had a particularly successful year with revenue up 43 per cent and an EBIT turnaround of $7.5m,” says Hunt.

Orcon, along with partners CallPlus and Compass, has recommenced investment in local loop unbundling equipment at Telecom exchanges to further improve margins in its broadband business. Sales of the recently launched mobile phone products have exceeded expectations, particularly for mobile broadband.

Kordia Solutions had another strong year in Australia, though a drop in revenue in New Zealand, where market conditions have been difficult, resulted in an overall revenue decrease of 6.7 per cent. Kordia has been able to diversify further in Australia with new customers including vividwireless and Telstra. Kordia has also signed a critical long-term network engineering and maintenance agreement with Nokia Siemens Network, supporting the Vodafone Hutchison Australia (VHA) mobile network across Australia.

Kordia Networks’ revenue was down 2.1 per cent with the impact of analogue television close down commencing with the termination of SKY Network Television’s UHF transmission services.

Kordia’s focus on the corporate market has intensified with the launch of OnKor – an advanced wide area network (WAN) product which enables multi-branch organisations to reduce networking and voice services costs. Geoff Hunt says that OnKor has been well received by customers.

“Kordia Group now has a diversified portfolio of scalable products and services in its target markets. The company is well-positioned in Australia for work on the National Broadband Network rollout or any alternative should there be a change of government Orcon is expected to maintain the current growth rate and Kordia Networks has a very strong sales pipeline, particularly for the newer products.

“We look forward to a further improvement in financial performance in 2010/11,” says Hunt.

ends

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